Within a few years, differences in viewpoints developed over cooperative terminal grain marketing. The State associations of Nebraska, Kansas, Oklahoma, and Iowa, which were most friendly to the activities of the Farmers National Grain Corp.-the national cooperative grain sales agency-withdrew their memberships in the Farmers National Grain Dealers Association.

Membership in the Farmers National Grain Dealers Association then comprised the following State associations: Farmers Grain Dealers Association of Illinois, Bloomington; Farmers Grain Dealers Association of North Dakota, Fargo; Farmers Elevator Association of South Dakota, Aberdeen; Farmers Elevator Association of Minnesota, Minneapolis; Farmers Grain Dealers Association of Ohio, Fostoria; and Farmers Grain Dealers Association of Indiana, Lafayette.

National Cooperative Elevator Association. In October 1933, the National Cooperative Elevator Association, with headquarters in Omaha, Neb., was organized. Its charter members included the Nebraska Cooperative Association, Omaha; the Kansas Farmers Cooperative Association, Hutchinson; Farmers Cooperative Grain Dealers Association of Oklahoma, Enid; and Farmers Grain Dealers Association of Iowa, Fort Dodge.

Enter Terminal Markets

Experience indicated that the presence of a farmers' elevator at a country shipping point was instrumental in improving practices on that market and that the local association helped to insure the farmer correct weights and grades. In addition experience demonstrated that this competitive element helped reduce local grain buying or handling margins.

It was apparent, however, that although local associations could assist in improving the price structure and trading practices at the local markets, they could not individually affect trading practices, prices and other con

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ditions on the terminal markets. Therefore, if farmers were to continue to develop their cooperative marketing system, they must find ways to extend the cooperative influence into the terminal market.

First Phase-Regional Grain Cooperatives.-The cooperative influence in the terminal markets in the form of grain marketing cooperatives began about 1910, but the real expansion started during the first World War and reached a high point in number of organizations in 1932. Two principal types of terminal marketing or regional grain cooperatives were formed during. this period-wheat pool associations and terminal sales agencies.

Wheat Pools.-The wheat pool movement was based on the principles of orderly marketing. Producers holding memberships in the organization agreed to market all their grain through their local elevator. The local elevators in turn combined to make up the pool at the terminal market.

The pool received the grain and advanced to the grower an agreed proportion of the market price at the time of delivery. The organization then attempted to sell an equal amount of all grain delivered in each month during the crop year. The pool operated on a nonprofit basis, returning to its members the entire proceeds above operating costs. Leaders of the wheat pool movement believed that regulating the sale of the grain would stabilize the market price. In no year, however, did the wheat pools handle enough grain to exert the influence intended.

The wheat pool movement reached its height during 1924-25. The 10 terminal market pools then operating reported almost 28 million bushels of grain handled during the season. During the 10 years of their operation, 1921-30, wheat pools handled more than 187 million bushels of grain for their farmer members. The wheat pool movement came to an end in the United States in 1930. At that time

the pools then in operation became affiliated with the Farmers National Grain Corp., organized as a national cooperative sales agency operating at most of the terminal grain markets in the United States.

Several factors contributed to the diffficulties of operating the wheat pools and their ultimate discontinuance. One of those was the difficulty of satisfying the member on the price received for his grain. A large proportion of the grain moves out of the hands of producers a few months after harvest. On an advancing market the grower takes a lower price when he sells immediately than if his grain is held for him by the marketing organization, providing storage charges, interest, and other expenses do not amount to or exceed the rise in price. On a declining market it is to the advantage of the producer to sell as quickly as possible. Declines in grain prices after 1928 were a decided handicap to the pool movement. Freedom of the producer to select the time for selling his crop seemed more desirable to many farmers than the idea of orderly marketing of the grain.

Another condition causing dissatisfaction among growers with wheat pools was the fact that they received only about two-thirds of the market price of their wheat at the time of delivery. Although additional payments were made from time to time, final payment usually was not received until the end of the season. Pool members were scattered over a large area and it was difficult for the associations to keep them advised of pool operations.

Terminal Sales Agencies.-As farmers' elevators increased in number they met difficulties in selling through established agencies. The elevators learned that they needed representation on the terminal markets. Agitation for cooperative grain sales agencies began in the Minneapolis-St. Paul market area and the Pacific Northwest in 1908. It was followed by formal organization of the Equity Cooperative Exchange, St. Paul, Minn., in 1911.

By 1920 the Exchange owned a modern 500,000-bushel terminal elevator. It became the terminal sales agency for many farmers' elevators located in North Dakota, South Dakota, and Minnesota. At one time this association represented nearly 100 local elevators. A decline in farmer interest after organization of the wheat pools was among the causes contributing to the failure of the Exchange.

In 1911 the Pacific Northwest TriState Terminal Co., Seattle, Wash., was incorporated on a capital-stock basis as a selling agency to furnish terminal marketing service for grain. It acquired a controlling interest in a score of local associations whose grain was to be marketed through the terminal. With the formation of the Washington Wheat Growers Association in 1920, the terminal company lost much of its volume. It ceased operation in 1921.

In 1914 what is now the Farmers Cooperative Commission Co., Hutchinson, Kans., was started as the Equity Commission Co. by 20 farmer elevator associations. In 1955, it maintained offices and operated terminal elevators at both Hutchinson and Wichita, Kans. The Farmers Union Jobbing Association, Kansas City, Mo., was organized in 1914, as a farm supply purchasing association for its member elevator associations. In 1918 this association began handling grain on a commission basis. In 1955 it was operating as a terminal or regional grain cooperative with terminal elevators at Kansas City, Mo., and Topeka, Kans.

In 1916 the Equity Union Grain Co., first known as the Equity Union Exchange, organized at Kansas City, Mo. This association was also still in business in 1955. The Montana Grain Growers, of Great Falls, Mont., organized in 1918. This association operated for only 3 years, going out of business in 1921.

Following 1920 the regional cooperative marketing agencies for grain developed rather rapidly. By this time there were enough local grain coopera

tives to center attention upon the development of cooperative terminal sales agencies. Available records indicate the number of sales agencies active in the various markets increased from 5 during the 1919-20 season to 26 during the 1937-38 season, the year of dissolution of the national sales agency. The peak number, 29, was reached in the 1932-33 season.

Second Step-Farmers National Grain Corporation. The years during and after World War I, as already stated, saw the development of terminal cooperative sales agencies. These selling agencies, usually began to operate on a specific terminal market with member elevators in the normal market region-thus the term regional grain cooperatives.

The Farmers National Grain Corp. was established on October 29, 1929, by the terminal or regional marketing associations. For some years previous to 1929, various attempts had been made to establish a national sales agency for grain cooperatives. Leaders in the cooperative grain marketing movement believed such an agency would serve many constructive purposes. It was expected to do much to coordinate the activities of the regional or terminal marketing associations, minimize speculation, and enable growers through their own organizations to exert more influence on terminal market prices and practices.

When the Farmers National Grain Corp. was created, there were some 3,600 local farmer elevator cooperatives. In 1928-29 these handled about 500 million bushels of grain. In this season, 7 wheat pools handled about 15 million bushels. Twelve terminal sales agencies handled about 52 million bushels.

These data show that the volume of business handled by local cooperatives was large. Of this quantity, however, only 67 million bushels was handled cooperatively on terminal markets by wheat pools and other regional sales agencies. Thus, the need of the movement at that time seemed not so much

an increase in total volume of business as greater coordination among the farmer organizations. Individual farmers' elevators put their wheat on terminal markets in competition with one another. Both pools and sales agencies often solicited the business of the same farmers. Therefore, much of the energy of the movement was wasted in competition among cooperative organizations of different types.

In December 1935, 23 cooperative terminal grain marketing associations, commonly known as regionals, were stockholders in the Farmers National Grain Corp.-the national sales agency. Nearly all of these had turned over their marketing functions to that organization. In 1935, the National controlled a total terminal elevator capacity of about 40 million bushels, nearly 18 million bushels of which represented owned facilities, and about 22 million bushels were leased facilities. However, this move toward centralized marketing did not hold the support of enough local associations. Upon dissolution of Farmers National in 1938, most of the owned facilities were acquired by the reorganized regional terminal sales agencies.

Return to Regional Marketing.Terminal or regional cooperative grain marketing associations, as they were reorganized following the dissolution of Farmers National, are those that have as their primary function the grain.

marketing services needed at subterminal and terminal markets by cooperative elevators operating at local shipping points. The terminal market or regional cooperatives are nearly all federated. That is, their members, owners, and patrons are the farmer cooperative elevators. Thus they contrast with the centralized type in which the regional association also owns and operates the local elevators and its direct members are the grain producers.

In 1938-39 the principal function of most of the regional grain cooperatives was a grain brokerage or commission selling service. As of 1955 most grain is purchased "to arrive" or "on track" and merchandised through subterminal or terminal elevator facilities. In 1938-39, 9 of the 18 regionals operated subterminal or terminal elevators with a total of 191⁄2 million bushels of capacity, most of which was leased. During the 1954 harvest season 22 grain regionals operated about 149 million bushels of subterminal or terminal elevator capacity located at 42 different markets. Practically all this 1954 capacity was owned by cooperatives, about 100 million bushels of it having been built since World War II.

Leadership on the part of grain regional management in modernizing and expanding elevator capacity since

World War II has been of great value to grain farmers in the wide areas served by the regionals. It has meant that farmers can store more of their crop. Thus, they can get the loan value established by the Government, rather than the lower harvest-season price.

National Federation of
Grain Cooperatives

On February 21, 1939, the regional grain cooperatives organized the National Federation of Grain Cooperatives. It has its executive offices in Washington, D. C. The Federation was organized for:

1. Assisting and advising its members on Federal and State legislation affecting them or their producer members.

2. Keeping its members informed on legislative matters.

3. Aiding and assisting its members in their dealings and relations with State and Federal Governments and departments thereof.

4. Informing its members from time to time on other matters of interest to them and their producer members.

The original membership consisted of seven large regional cooperative grain marketing associations. In 1955, the Federation's membership included 19 regionals and 3 large dry bean marketing associations.

COOP

OOPERATIVE action among livestock producers dates back to colonial days. Among the earliest cooperative activities recorded was the organization of societies for importing purebred cattle, beginning in 1785. Community drives of livestock from Virginia and the Carolinas to the coastal cities of Baltimore, Philadelphia, and New York started about 1794. Later cooperative developments

took the form of public auction sales of purebred cattle in Ohio in 1836.

About a million farmers and ranchers now send their livestock to market through cooperatives. Livestock and livestock products, with their $1.5 billion volume of business, ranked third among all cooperative marketing groups in 1952-53. That same year, a total of 671 associations handled livestock and livestock products.

Growers Organize Locals

The first local cooperative shipping association, the Farmers Shipping Association, was organized at Superior, Nebr., in 1883, according to available records. This association of Nebraska and Kansas farmers, formed to assemble and ship livestock by rail to central markets, operated continuously for over 50 years. The shipping association movement spread into other midwestern States during the early 1900's, being most successful in Minnesota, Wisconsin, and Iowa.

By 1916 more than 600 of these locals were in operation. The period from 1917 to 1923 was one of rapid expansion. By 1924 an estimated 5,000 locals were assembling and shipping livestock by rail from country points to terminal markets. The majority of these local shipping associations were located in the Midwestern Corn Belt States. Their function was to provide shipping service for a limited area around a rail loading point.

The bulk of the patrons of the local shipping associations were small farmers, or less-than-carload shippers, who had only a few head of livestock to sell at a time. The shipping association enabled them to patronize markets they otherwise could not reach unless they pooled their livestock with that of other farmers in the area.

The associations consigned practically all livestock shipped by patrons to commission sales agencies at termimal markets. These sales agencies fed, watered, sorted and sold the livestock; prepared account sales; and remitted net proceeds to the local shipping association manager. The manager distributed checks and account sales to patrons.

County shipping associations, organized on either a federated or a centralized basis, followed closely in the wake of the development of local livestock shipping associations. In the federated type, the local association assembled and shipped the livestock from local country points, and the fed

eration's central office forwarded all returns and account sales back to the local association. In many cases the local manager prorated the proceeds and sent the checks to the individual patrons. The centralized type, largely confined to Ohio, was the forerunner of the modern concentration yard. In the centralized type of operation, livestock from a relatively large area was concentrated for sorting and assembling into carloads. This concentration of volume made more frequent shipments possible.

Since 1924 the number of local shipping associations has declined sharply. In 1954 approximately 500 locals were estimated to be in operation. Practically all of these function as truck associations. Only a few associations continue to ship livestock by rail.

Among the principal reasons for the decline of local livestock shipping associations are the following:

1. Extension of hard-surfaced, allweather roads which make it possible for trucks to move livestock at any season direct from farm to market without the intermediary of the local livestock shipping association.

2. Shorter time required in moving